Microsoft released FY27 Q1 numbers. The #XBOX components of the quarterly numbers are nearly always summary level results, but we should go through them anyway. XBOX is part of the "Devices and Consumer" segment (renamed from "More Personal Computing"). Xbox Revenue: $5.4B - Microsoft split out several components of the business, de-emphasizing businesses such as Windows and Xbox. Xbox is now the 5th largest revenue driver in the company, out of 8. - In "Devices and Consumer," the company mentioned that operating expenses declined, driven by XBOX. This is unlikely to be savings from layoffs. Severance packages were continuing throughout the quarter. Instead, this would likely be related to contracts, purchases, suppliers, etc. - They also mentioned that amortized costs of of the ABK acquisition are now lower, which raises operating income. Remember, this is a non-cash number, but it is how the business calculates profitability in the accounting realm. ABK amortization costs will likely continue to decline over time. - XBOX content and services revenue (the core metric) declined 2% YoY (1% in constant currency), making it essentially flat to the previous year. Declines in game pass and third party are probably seasonal, but it's something to keep an eye one. Continued Game Pass decline is somewhat concerning to me. They highlighted increases in first party as a partial offset (likely Minecraft). - Xbox is predicting content and services growth to be up "mid to high single digits" in FY27 Q2. - Xbox YoY growth will likely be strongest in Q2. You can probably assume this is due to MW4 and GTAVI. Thoughts? The US summer months are often a softer period in the games industry, but XBOX does appear to be leveling off in terms of their performance decline. It's difficult to make any concrete statement about the business. They are in a transition period and the cost savings from restructuring is yet to kick in. We also can't make a definitive statement about any longer term plans, as it's still too early to tell. Again, too early to tell.

I'll take a deeper look tonight, but here's my translation: The revenue decline is slowing, but obviously continued in a slightly negative direction. However, revenue isn't the bottom line and Sharma reports that accountability margin improved. While the devil is in the details, this can be translated into #XBOX being more profitable than the comparable period. Perhaps unsurprisingly, but Minecraft and WoW Forever are driving engagement in their respective domains. It's also generally accepted that Modern Warfare 4 is looking at healthy numbers and a significant improvement over BO7. Console? What else do we say? Xbox has struggled to deliver devices the entirety of this device "generation" (even when they were in higher demand). It hurt them in the long run and it appears that they understand it is an issue. Does this improve, especially under higher device COGS? I don't know.

Capcom released their H1 (6 mo) financials for year ending March 2027. Overall, an impressive H1 for the company, showing both revenue and profit increases YoY. Cash generation also increased as Digital Contents showcased their best operating cash H1 in some time. However, Capcom did NOT raise guidance for the year, prefering to stick to their current fiscal year plan. Digital Contents H1: - Net Sales: 851 - 100M yen (+71% YoY) - Operating Profit: 523 - 100M yen (+67% YoY) Company Op Cash H1: 368 - 100M (best cash H1 in many years) Digital Units PC: 21M Digital Units Console: 13M Onimusha: 1.7M+ units Note: #MonsterHunter Wilds did not see any updates on the top 10 best seller list, while MH World did receive a mention.